Wednesday, May 17, 2006

The Price Of Gasoline

(All emphases by Always On Watch)

According to the article "Gasoline Is Not Going Up!" another cause underlies the sticker shock we're experiencing at the pump. Excerpt:
"...The dirty little secret is this: Gasoline is not going up. It is the dollar your [sic] buy it with that is going down; and it has been going down in value for a very long time because it is just government issued paper with numbers printed on it and nothing physical in storage anywhere to back it up. What's more, the dollar is now going down faster than ever....

"Over the years, those gold reserves decreased while the printing of that multi-colored paper we've come to love, increased, which today amounts to nothing more than a lot of government IOUs - printed promises on colored coupons, if you will, guaranteed by something that no longer exists; and as that pretty paper piles up it plummets in purchasing power here and around the world - and now faster than ever.

"Lately the printing presses have been working overtime to produce even more paper for everyone to pass around for their goods and services, much of which is funneled directly into the near record-breaking stock market by the government's own 'Plunge Protection Team' so as to prop it up on those economically rough days when it might otherwise have taken a severe beating or collapsed altogether, thereby strengthening the ongoing illusion that the economy is thriving, when it is in reality, an imploding house of paper. And all those government sound bites and statistics you hear quoted in the mainstream media each night - more illusion…

"That's why, in spite of our 'strong economy,' gold hit $725 an ounce last week, (up almost 67% in a single year) gasoline is almost three times what it was in 2002; and as for housing and real estate - well lets [sic} just say they're through the roof; not because these things are all worth more now than they were a short time ago; but because the dollar used to purchase them with is simply worth less - a lot less....

"...[O]il has, for decades, been bought and sold using dollars only. That was a deal OPEC made with the US years ago. That's why the dollar is referred to as the world's 'reserve currency.' If you wanted oil, you had to have American dollars to buy it with.

"But that's all changing now. More and more oil-producing countries want to switch to the Euro or other currencies to sell their petroleum products to the world...."
Read it all.

Does Paul Proctor have a point? Or is he merely another doomsaying conspiracy-theorist? I been hearing similar predictions from some forty years ago until the present day.

60 Comments:

At 5/17/2006 11:02 AM, Blogger Mussolini said...

The price of gas is destined to increase. We are industrializing turd world countries.

This is the price we pay for globalization.

The higher the prices go, the greater increased pressure to switch to alternative fuels.

This registers about a third of a flea turd above zero on my "give-a-shit" meter.

 
At 5/17/2006 11:21 AM, Anonymous the merry widow said...

Yeah, but as gas prices rise so do food, clothing, medicine, etc. We are on a very tight budget as it is, where do we go when we can't afford food? You can only pare down so far, what do we give up? water and sewage? electricity? clothing? Give up any of those and you either have your house condemned or get arrested for indecent exposure! Yes we are looking for jobs, but because of ages and education there are some limitations. You may be able to say, so what, I can't!

tmw

 
At 5/17/2006 11:23 AM, Anonymous the merry widow said...

Oh, and yes I'll be putting in a garden in the space I have and we don't have luxuries.

tmw

 
At 5/17/2006 12:11 PM, Blogger Cubed © said...

I wish he were wrong, but unfortunately, he is right.

I especially liked his use of the word "coupon" for our paper money. Very clever, and unfortunately, very accurate.

Paper money was devised because it's a lot more portable than, say, a cow or a truck load of bricks. Paper money is a promissory note; it says that whoever is using it has access to something (ideally, gold) that has the "purchasing power" of the amount stated on the promissory note.

Few of us are old enough to remember the "gold standard," which meant that the promissory note was good for the purchase of x-amount of gold, for which it could be exchanged at any time.

Gold was not an arbitrary standard to base our money on; it is chemically relatively non-reactive, so it is stable; we find it beautiful; it is rare enough that a small amount can stand for purchases that are in our "scale" - that is, we don't need a truckload to buy a loaf of bread, but not so rare that we need a microscope to see the amount needed for a loaf of bread.

Gold wasn't the first standard; it evolved, through its utility, as a monetary standard by mutual agreement among peoples all around the world, from early times.

For very small purchases - actually, the loaf of bread qualifies - silver was similarly chosen as a secondary standard. It wasn't as stable chemically (it tarnishes), and while pretty, it didn't have the esthetic appeal of gold, and it was more plentiful. Just the same, it, too, like any other good or service, was related to gold as a standard of value.

Because the amount of gold is fairly stable, so is any paper money tied to it. If suddenly a huge source of gold were found, the puchasing power of a unit (commonly an "ounce") would fall, and you would have to have more of it to buy the cow or bricks.

But that's the beauty of gold - it just keeps being found and refined at a fairly steady rate, so when we tie our paper money to it, our paper money is stable too. Prices go up when the production of a good or service can't keep up with demand for them, and prices go down when a good or service doesn't find enough consumers who want to purchase them.

Some of you may be old enough to see the words "silver certificate" on our bills. Today, the words have changed to "Federal Reserve Note." The promissory notes based on silver were a convenient unit, but they were backed by gold for really big deals.

Some of you may be old enough to remember that our dimes and quarters were really made of silver, instead of the coated copper "tokens" that they have become today.

It didn't take long for consumers to figure out that copper, even disguised with white metal coating, didn't have the "purchasing power" of gold or silver, and that the "Federal Reserve Notes" were tied to essentially nothing.

They are just free-floating pieces of high-quality paper.

Some socialist economists, like the recently deceased John Kenneth Galbraith, would have us believe that the value of money - bills and coins - is arbitrary, that its value is psychological, not "real."

Wrong.

Money - coins and promissory notes - are as real as the orginal amphorae of olive oil or dates that they stood for. In fact, it was probably the identifying labels on the amphorae that were the first money. In those early days, the standard wasn't gold, but the goods they stood for. That was more convenient than hauling oil or dates around.

It was the use of coins (and eventually paper) that permitted specialization of production and services, where people could focus on doing what they did best. It was money that allowed the explosion of efficiency - another way of saying productivity - for mankind, with an increased standard of living.

When we break the ties between the standard of value that money is tied to, then it becomes just aother piece of paper or a token, and that's the situation we find ourselves in now.

During the Civil War, the South initially had its printing press in Richmond. To finance the war, the printing press began to run day and night. When the Union forces were advancing on Richmond, the printind press was packed up and moved, and during the move, inflation, for the first time since the beginning of the war, subsided and prices leveled off.

Of course, that didn't last long, and before long, the South was in pretty much the same position as Weimar Germany, when people had to carry around wheelbarrels ful of money to shop for food, and the prices skyrocketed between morning and evening. Their presses were running too.

FDR took us off the gold standard, and our economy has been having problems ever since.

The author of the article is right; demand for oil is going up, for sure, and since production is falling below demand, prices are going up. But most of that pressure for increased prices isn't because of falling availability, it is because of falling purchasing power of worthless money.

Economics is more than a monetary system, it is philosophy in practice. In a free market, we are free to think, to make decisions, to choose with whom we associate and do business, to own and dispose of property, to move about the country and the world - in short, the economic system of a country is a reflection of the values of the citizens in every aspect of life.

Only in a free economy do we respect rights, including the right to life, liberty and the pursuit of happiness.

Any time the government intervenes to control the economy (as contrasted with intervening to protect the rights of an individual citizen), it violates the principles upon which our country was founded, to say nothing of the Constitution.

 
At 5/17/2006 12:36 PM, Blogger G_in_AL said...

I think something that this guy doesn note though is that this problem with the relative non-value of paper money is not a US-specific problem, and that is where the the Some socialist economists have it right that the value is arbitrary.

The entire world economy is based on numbers, stored on computers, connected through networks, that never actually tie into real paper money sitting in a real vault somewhere.

Think about it... do you get direct deposit with your paycheck? I do..

I get "paid" on a Friday, so some numbers move from my companies account file in their bank's database, to my account file in my bank's database. No paper money moves, no gold moves, no cows, oil, or peanuts move... just numbers in a database.

Now, I go to the store and buy myself the new Kung-Foo grip ninja doll for my kid... I swipe my debit card.

Now the numbers in my account at my bank's database change, and the store's account numbers at their bank change. Again, no paper or other goods have actually moved.. just digital numbers in an account.

I can walk into my bank and withdrawl everything, then stop direct depositing my paycheck, drop all credit cards, pay off my loans, and sit with piles of money under my bed... THEN this type of doomsday prophesy becomes real.

Until then, the entire world is so inter-connected with "numbers" in different accounts across the global network that if the US, European, or Asian economies were to collapse (a la Great Depression), it would be even more global than it was before WWII. Seriously, Most of China's credit and buying power are based off the fact that they own so much of our debt... if we go "bankrupt"... then there goes China's buying power, because all the debt they own just became worthless.

Do you think these guys are really going to let ANY of this happen?

Now, to blame inflation on de-value of money (only) is a little narrow sighted. Think about it.. prices have gone up FOREVER! not just since FDR, and not just for the last 20 years. It used to cost a nickle get into a movie, and it there used to be nickle and dime stores.

$100 was a fortune... before FDR, but it took $1000 to make that same fortuen... before FDR. This is life... sure some jockying for power between the major world economies goes on, but none can afford for the other to tank... it just isnt feasible anymore.

 
At 5/17/2006 12:41 PM, Blogger Mussolini said...

TMW: Don't be too worried.

Only begin to worry if congress thinks it can get involved in "helping out" the consumer.

Guaranteed skyrocketing energy prices.

However, the beauty of a market society is that prices are relatively stable across the board. As you say, increases in gas prices raise prices on a whole range of industries and services.

As your dollar gets tighter, the same number of companies are chasing it. This result in forced efficiencies and cost reductions, including alternative methods of supply and capture of your dollar.

In other words, prices elsewhere will fall.

Innovation is borne of necessity. Perhaps light bulbs become feasible to supply that use half as much electricity?

Americans are ingenious bastards; give us credit for figuring the easiest way around a problem, but for congress to block it. Assuming a harsh enough crisis, the public can force the congress from holding onto stupidity.

So have faith.

 
At 5/17/2006 1:19 PM, Blogger Mr. Ducky said...

Gee let's bring back the gold standard. Mercantilism was such a success. Right cubed?

mussolini, one problem with the declining dollar is the potential for foreign governments to avoid our debt instruments. We could probably avoid a lot of grief by saving more. We must do that inevitably. Myself, I'd lower the tax rate on savings, not dividends.

 
At 5/17/2006 1:32 PM, Anonymous the merry widow said...

Yeah Mussolini, The rumor was that JFK wanted to take us back to the gold standard. Personally I believe all the manipulation in the world will not stop a world wide depression. One heck of an adjustment! Right now I'm thinking of gold and silver...at least I refuse to have any debt. No way, no how! Maybe I'm in a better position to weather hard times!

tmw

 
At 5/17/2006 1:47 PM, Blogger WomanHonorThyself said...

The higher the prices go, the greater increased pressure to switch to alternative fuels....but who is willing to do that?..Follow the money eh?

 
At 5/17/2006 2:05 PM, Anonymous Anonymous said...

At the end of the Revolutionary War, the Second Continental Congress started printing paper money, but without the gold to back it up, it was worth nothing. Is the same thing happening today? How do we get the gold we need to back paper when the paper is worth nothing? Also, I think the government could do better with spending. Sometimes, I wonder where all tax dollars are going. And I'm not even driving yet!

How can I afford gasoline when I get out of college? Something to think about... I think part of the problem too is that American society is no longer set on the foundation of Christian principles. Don't forget, the Founding Fathers wrote the Constitution with the intent that the men that followed it would always "do the right thing" or behave with honor. Meaning, the people would not take advantage of each other (gasoline price-gouging? *hint hint*) or not earn their living honrably (identity theft, for instance). Without those values, we're digging out the foundation of our society. And what building can stand without a solid foundation? If the government didn't have to be so worried about price-gouging and security, we wouldn't be spending as much money. (I hope.)

-A.M.

 
At 5/17/2006 2:32 PM, Blogger Mussolini said...

Ducky:

I think something is being engineered in light of the fact that America will not be able to meet it's welfare obligations in just a few years.

There's too much collusion at the top between the democratic and republican parties to spend as much and as fast as they can. Something is afoot.

You can see the giddiness in their faces as they pass bigger and bigger pork bills.

I think we're looking at an engineered destruction of the dollar. Not even a sandal-wearin' hippie could be so wasted on pot as to so willfully destroy the dollar as our politicians are.

We're not being told the whole story.

 
At 5/17/2006 3:08 PM, Blogger Mr. Ducky said...

"We aren't being told the whole story"

True that. I kinda shrugged when the Fed announced they wouldn't be publishing the M3 any longer but now I'm very concerned that the size and expansion of the money supply is not being truthfully reported.

Also, the world economy is growing so large that the Fed is much less powerful than it was only a brief time ago. Moves by the Fed used to cause near instantaneous eactions. Not so now as we have seen by the resistence in interest rates. Something real nasty might be in the tunnel with us.

Folks should have been a little suspicious when Chuckles was telling them that the economy is fine and he'd found a way to turn their home into an ATM.

 
At 5/17/2006 3:42 PM, Blogger Cubed © said...

I am so very discouraged that we are all but forbidden to learn economics in school, and by the time we get to college, few of us are interested.

Ducky,

I wouldn't bother responding to you, except that you aren't the only one who doesn't know what "mercantilism" is.

What it ISN'T is "capitalism."

g,

No matter how long the "paper chain" is, ultimately, these various "certificates" have to be tied to something - and the most stable, universally accepted "something" is gold. Even silver is tied to the purchasing power of gold.

You're right about inflation, it has been a threat for as long as there have been significant government controls over the monetary supply. Even Nero caused inflation when, in his spending spree on things like building the "Golden Palace" after Rome was burned, shaved a little bit of silver off each coin, making it worth a little less, and driving prices up. One of his followers, Diocletion, managed to accomplish much the same thing with price controls - another device that throws sand into the delicate gears of the economy. Even Hadrian refused to permit an inventor to manufacture his invention because, he said, it would "deprive workers of their jobs because it was so much more efficient (another of the many fallacies the Leftist press would have us swallow).

A.M.,

You are asking some good questions - you are especially fortunate to be asking them while you are young and not yet engraved in stone! If you haven't done so already, you might enjoy reading Walter William's ten-part series on economics at his website.

Thomas Sowell has two great books for those of us (that would be most of us) who were deprived of any economic education (except to be told by the postmodernists how evil "capitalism" and "materialism" are) in school. They are: "Basic Economics" and, after that, "Applied Economics." Another very informative and engaging little booklet is Ludwig von Mises' "Economic Policy," a collection of six (I think) lectures he gave in Argentina in 1958. It goes in and out of print quite regularly.

From these, you can have a whole library of terrific books on economics, but these are an excellent place to start - especially the Walter Williams series, which is 1) convenient and 2) free.

Moussolini,

"We're not being told the whole story."

You got that right; the "redistribution of wealth" has been the eternal dream of the postmodernists of every ilk, from the simple Left and socialism to out-and-out communism. There is no better way to gain control over the freedom to think, to make decisions, to own and dispose of property, to freely associate, to speak out, than to gain control over the purchasing power of the individual.

When that is done, the individual can be coerced into behaving however the power-lusters and control freaks want him too, because if he doesn't behave, then the control freaks can manipulate his ability to support his own life, and, of course, to pursue happiness.

For example, have you ever made a decision on the basis of some consequence described in the tax code?

There are very few government interventions into the economy that aren't designed to coerce us into one set of behaviors or another, from welfare ("vote buying") to luxury taxes.

Merry Widow,

Good for you! No debt? Have gold? You will definitely survive better than the average bear. I wish we were in that enviable position, but we have the "advantage" of being old, so we don't have that much longer to live.

We are headed in a downward spiral; if the millenialists were worried about happenings in 2000, just wait until Bush's border thing, the Islam conquest thing, and the continuously expanding welfare thing, etc. reach a critical point.


Folks, it's no accident that the schools refused to acknowledge the importance and the virtues of a free market; it did not support the agenda of the Utopian Socalists and their ilk, who managed to gain control of the government-run school system almost as soon as it was created in the mid-1800s. By the 1950s, they had fully succeeded in infesting them, and by the 1960s, we saw the first highly public evidence of the beginning of the destruction of our nation.

 
At 5/17/2006 3:48 PM, Anonymous themerrywidow said...

This is a common strategy Ducky, every empire with anything resembling a middle class ends up with the upper classes with thier contempt of the "greengrocers" teaming up with the "will nots" of the lower class, who envy the "greengrocers" to deprive said middle class of the earnings and wages that they have worked to get! It was the Romans I believe who coined the contemptuous term, green grocers. This pattern always shows up when the virtues of the founders of the nation were tossed out as "old fashioned", not relevent, or to restrictive! Then the decline!
Sound familiar?

tmw

 
At 5/17/2006 4:04 PM, Blogger Cubed © said...

Oh, wow! I had to dial up my modem again (am I the last person on the face of the earth with dial-up? Where we live, we can barely get the satellite signal on the southern horizon, and to do that, we would have to cut down our beloved old-growth cedar trees - ain't gonna happen!) to tell you about another interesting resource.

It's at http://www.econlib.org/LIBRARY/Essays/rdPncl1.html, and it's called "I, Pencil."

I first read it when I was a child, and even though I couldn't find it again until a few months ago, I never forgot it. You'll enjoy it yourselves, and by all means, if you have children, let them read it to!

I apologize for the failure to use a link to the article; every time I try to use tags, I'm always told that they won't work. I'll get it eventually!

 
At 5/17/2006 4:04 PM, Blogger Cubed © said...

"...too..."

 
At 5/17/2006 4:20 PM, Blogger nanc said...

i agree wholeheartedly with paul proctor - he is usually spot on in his take on things. he has nothing to gain and nothing to lose. i read his article yesterday morning and had to let it sink in for awhile.

as i thought about it, my mind wandered to counterfeiting money - which btw i would never do, but why does our government print more money than we can back? if you or i were to go out and intentionally write hot checks - we'd end up with a jail sentence.

a few days ago john stossel was on fox and he said all things considered, gas is pretty cheap now.

it's too late to buy gold; big deal - there is no longer a gold standard. depressing - no - not if you know Who's really in charge.

 
At 5/17/2006 4:22 PM, Blogger nanc said...

cubed - we learned economics and the stock market when i was in school in the sixties and my kids want to know why they're not taught it now. so it's up to us as parents to teach them.

 
At 5/17/2006 5:28 PM, Anonymous Mustang said...

Some prof on CSpan the other day commented that we Americans pay more for designer water than we do gasoline, and wondered aloud (rhetorically) why we aren't complaining about that. He made a good point.

What is the US dollar doing in the monetary market? Is it slipping next to other currencies?

 
At 5/17/2006 6:01 PM, Blogger Mussolini said...

The dollar rallied a bit against the euro, in recent weeks.

That's about it.

Otherwise it sucks. The EU interest rate is somewhere below 2%. The US interest rate around 4 and a few flea spits.

The drop is the uncertainty over spending, trade deficits, and OPEC trying to switch oil trading to the euro.

 
At 5/17/2006 6:50 PM, Blogger Mr. Beamish the Instablepundit said...

Sorry world, we can't afford the fuel to ship our surplus crops to your pathetic, sub-American "nations" anymore. Certainly not for free. Guess we'll have to eat it ourselves. Try not to gross me out with your fly-covered runts on TV while I'm trying to eat my dollar-a-pound prime rib.

 
At 5/17/2006 6:53 PM, Blogger Kyle said...

I think the last sentence of the main post said it all. I know that all of my life doomsayers have been predicting horror.
Can things get bad? can our economy tank? Sure, in fact it probably will fairly soon. But It will be a temporary correction. In fact I am starting to believe that a big or prolonged recession is not even possible anymore barring some world wide war or catastrophe. That is because of the amazing resilience of the international economy due to most nations now having a whole or partial free trade policy.
If things go sour in one part of the world excess inventories can be bought up in another part of the world in a matter of minutes. This is in contrast to earlier times.
As for Gold. Sure if we had some sort of limited specie standard then our dollar would be very strong. Our exports would suck very much and it is not at all certain we would be much better off.

 
At 5/17/2006 7:08 PM, Blogger Always On Watch said...

The stock market took a huge downturn today. I'm sure the reasons for the downturn will be talked to death tonight and tomorrow.

 
At 5/17/2006 7:10 PM, Blogger MissingLink said...

The guy's grasp on economics is ...well very basic.
And of course he ignores the obvious - current political events, which caused drastic global oil production drop.

Two countries are mostly responsible for the price hike:
Russia and Venezuela.
Russia cut oil supply to a few Eastern European countries e.g. Baltic States, Poland, Hungary,Georgia, Armenia etc to force them back under Russian influence.
see this as an example: http://www.energybulletin.net/12272.html
http://www.newratings.com/analyst_news/article_1169889.html
As a result of this action all those countries had to change their traditional supplier (arab states, Norway).

At the same time Chavez is moving rapidly into state ownership of oil resources and production.
It resulted in significant oil production drop (AC signaled this in one of his posts).
It is hard to estimate how much the Venezuelan production of oil dropped but some believe it almost by 60%.
It is so bad that Chavez had to strike a deal with Moscow and the Russians will have to supply oil to some of the Venezuela's clients to fulfill Venezuela's contract obligations.
see this:
http://sisyphus.gnn.tv/blogs/15057/Venezuela_paying_2_billion_for_Russian_oil

Some more examples indicating Ven. production drop.

http://www.venezuelanalysis.com/news.php?newsno=1935

http://news.morningstar.com/news/MW/M04/D05/F36F5C44-E37B-4F03-BB55-0F5484D8981E.html?pgid=qtqnNews4

http://washingtontimes.com/op-ed/20060426-090416-2306r.htm

Additinally the Mexican oil production is also shrinking.
http://www.worldpress.org/Americas/2326.cfm#down

 
At 5/17/2006 9:00 PM, Blogger Always On Watch said...

Missing Link,
The guy's grasp on economics is ...well very basic.

In my experience, doomsayers are often out to sell me precious metals. My husband used to be in that business, back in the big silver-boom of the 80s. And former customers are again crawling out of the woodwork and making inquiries of him even though my husband is no longer in that business.

 
At 5/17/2006 9:01 PM, Blogger Always On Watch said...

Kyle,
Does today's global economy follow the "old rules"?

 
At 5/17/2006 9:05 PM, Blogger Always On Watch said...

A.M.,
the Founding Fathers wrote the Constitution with the intent that the men that followed it would always "do the right thing" or behave with honor. Meaning, the people would not take advantage of each other

Yes. What we have today is capitalism without conscience.

Furthermore, much of our economy is based on the ability of taxpayers to fork over those tax dollars. If payment becomes impossible here in the United States, a worldwide depression will ensue. At least, that's what I believe.

Much of our nation's economy has historically been based on manufacture. We can't manufacture oil!

But other sources of energy exist. Problem is, those sources have been neglected over the past decades, and now our economy is "owned" by foreign powers.

 
At 5/17/2006 9:07 PM, Blogger Always On Watch said...

Mr. Beamish,
Sorry world, we can't afford the fuel to ship our surplus crops to your pathetic, sub-American "nations" anymore.

Strategy for a standoff we can win, I think. But the "compassionate ones" would villify any such step.

 
At 5/17/2006 9:10 PM, Blogger Always On Watch said...

Mustang,
Paying big bucks for designer water is voluntary spending. But for the vast majority of us, we ARE dependent on foreign oil in many respects.

I've heard some economists opine that oil is the new gold--that is, the new "monetary" standard, essential and against which all values are set.

The fact remains, however, that neither precious metals nor oil can be eaten. And oil is not an unlimited resource. From what I've heard, Saudi could be as close as 10 years away from depleting their supply. A shortage of supply would drive oil prices even higher.

 
At 5/17/2006 9:15 PM, Blogger Always On Watch said...

TMW,
Staying out of debt is key to surviving a depression. But today, just taking personal steps may not be enough. How many people do you know who can save enough to pay their real-estate taxes if the dollar devalues and one is living on a fixed income?

 
At 5/17/2006 11:37 PM, Blogger Mussolini said...

I plan on pimping hamsters to Hollywood types to pay my property taxes.

 
At 5/18/2006 12:10 AM, Blogger Mr. Beamish the Instablepundit said...

Strategy for a standoff we can win, I think. But the "compassionate ones" would villify any such step.

And then what?

Personally, I think "allowed the effects of backward leftist government forms in other nations to crumble without financial and humanitarian assistance from America" looks good in a history book.

 
At 5/18/2006 7:47 AM, Blogger Always On Watch said...

Mr. Beamish,
Considering we are now considering giving--if not actually giving--financial "humanitarian" aid to those under the rule of Hamas, I can just hear the outcry if we were to cut off aid to those "moderate" oil-rich nations.

We finance our enemies. That is BEYOND stupid.

If the U.S. economy crashes, that crash will reverberate around the world, but we'd get the blame for it.

Here is a short article about how foreign-aid is tax money going down the toilet.

 
At 5/18/2006 9:15 AM, Blogger cube said...

I'm no economist, but I do know that even a broken clock is going to be right twice a day.

 
At 5/18/2006 9:31 AM, Blogger beakerkin said...

Hold on folks do not let Ducky anywhere near economis. His far leftwing bretheren have done everything possible to raise the price of gas.

1 Domestic oil production increases supplies and creates jobs. However this upsets the Tie Die Marxist unwashed friends of waterfowl.

2 Nimby every infrastructure and power grid project by the same cast

3 Raise taxes on gas so that the same crowd can feel good about themselves.

If you want to lower the price of gas keep the Tie Die Marxist friends of waterfowl away from law making. Improve America deport a Marxist today and keep them in Cuba.

 
At 5/18/2006 10:55 AM, Blogger Mr. Ducky said...

"the Founding Fathers wrote the Constitution with the intent that the men that followed it would always "do the right thing" or behave with honor. Meaning, the people would not take advantage of each other."

In other words, they were completely out of step with Adam Smith who heavily favored workers rights in the inevitable conflict.

 
At 5/18/2006 11:16 AM, Blogger Mr. Ducky said...

"Mr. Beamish,
Sorry world, we can't afford the fuel to ship our surplus crops to your pathetic, sub-American "nations" anymore.

Strategy for a standoff we can win, I think. But the "compassionate ones" would villify any such step."

First, a lot of nations in poorer countries would be happy to have us stop exporting subsidized crops. If we stopped they could better develop their own internal markets.

Anyway, Europe, Australia and South America would take up the slack. The reason we are exporting is subsidies, not because there is a natural demand.

 
At 5/18/2006 11:44 AM, Blogger American Crusader said...

Formal links between the major world currencies and real commodities were severed completely under Nixon's administration. Since then, we have seen fluctuations in gas prices and in dollar versus other currencies. At this moment, the dollar is low but it has no connection to the price of gold.
Under Jimmy Carter, the price of gold reached $800 per ounce but then receded to about $300 per ounce where it has stayed until the last couple of years.

 
At 5/18/2006 1:12 PM, Blogger Cubed © said...

"cube said...

I'm no economist, but I do know that even a broken clock is going to be right twice a day."

Who is "cube"? It isn't I.

 
At 5/18/2006 2:35 PM, Blogger American Crusader said...

> Home > Middle East Review Comment on this ArticleEmail this article
Chavez proclaims end of U.S. Empire
5/16/2006 1:30:00 PM GMT

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Interesting read..


Chavez speaks at the Camden Centre London, during his arrival in Britain

Venezuela’s leader Hugo Chavez, who has just paid a visit to London, announced plans to ship his country’s oil to the needy, and declared that the “final days of the North American empire” are drawing near.

 
At 5/18/2006 3:07 PM, Anonymous the merry widow said...

Funny, gas prices have dropped about 8 cents a gal. in the past 2 days! Hmmm...

tmw

 
At 5/18/2006 4:10 PM, Blogger Mr. Ducky said...

It's like boiling a frog, merry widow. You don't put the frog in the very hot water or it jumps out. You gradually bring up the heat.

So folks will see a drop and after getting used to the price at $2.40 will not get comfortable at $2.90.

So it's more than doubled in a relatively short time. Demand hasn't doubled in that time. In fact I don't see gas lines so supply must be reasonably adequate.

Something's happening here but you don't know what it is...do you, Mr. Jones?

 
At 5/18/2006 5:43 PM, Anonymous the merry widow said...

Ducky- That was what the hmmm was about. I'm just waitting for the other shoe to drop! Summer is coming and I wouldn't be surprised if prices went over $3+ per gal.! Well we sure aren't going anywhere except if we have to evacuate for a hurricane, but I'm not to worried about that! Fortunately I plan on going to Sam's Sat., will stock up and gas up there. Tis the season.

tmw

 
At 5/18/2006 5:48 PM, Blogger Brooke said...

You are right about that, Ducky. Imagine the uproar if three years ago we were paying $2.40. Today, most of us would be happy at the 'cheap' price after paying $2.90 for weeks!

 
At 5/18/2006 6:03 PM, Anonymous the merry widow said...

Brooke- Wish it had been only $2.90 per gal.! We were at $2.999 at most places, I've seen it down to $2.76 in a few places. We've just about given up on beef, that's a special treat, treated with respect too!

tmw

 
At 5/18/2006 6:16 PM, Blogger Always On Watch said...

Gas prices are down a bit right now, as is the price of a barrel of oil, but I don't expect that dip to last. I hope I'm wrong!

 
At 5/18/2006 7:58 PM, Blogger Mr. Beamish the Instablepundit said...

Fuuny thing about oil prices. They'll be out of most of the world's range before America really feels a pinch. A three-pronged strategy of cutting gasoline taxes, building more domestic refineries, and banning Democrats from political office will reduce gasoline prices at the pump.

 
At 5/18/2006 8:58 PM, Blogger Cubed © said...

AOW,

You said, "What we have today is capitalism without conscience."

I feel embarrassed to disagree with you on your own blog, but we don't have capitalism, much less "capitalism without conscience." What we have is what the economists call a "mixed economy."

The "mix" is between the feedoms of capitalism and the controls of a totalitarian society.

Capitalism is a social system based on the acceptance and recognition of individual rights. Totalitarianism is a society where the rights of the individual are not recognized, and in fact are freely violated.

A "mixed economy" is where there are some of the freedoms of capitalism, mixed with the controls of a totalitarian society.

Capitalism embraces individual rights - the right to think, to make judgments, to speak out, to make decisions and to own, use, and dispose of property. It prohibits the violation of rights - the initiation of physical force or its intellectual equivalent, fraud and deceit.

Our Founders ALMOST gave us a capitalist society, but didn't quite make the grade. One of their biggest mistakes was the inclusion of "eminent domain" in the Constitution. "Eminent domain" was a leftover from the "divine right of kings," where the power of the monarch was absolute, and he owned everything. The individuals under his control lived by permission, not by right. That particular failure (which must be corrected at some time in the future) is what gave us one of the worst government-sponsored violation of individual rights we have suffered in quite a while - the recent "Kelo vs. CT" decision of the Supreme Court.

Nevertheless, early in our history, we were Near-Capitalists, and the freedom we had that resulted to innovate, to create, to produce, and to benefit from the fruits of our labors made us the most attractive place on the planet for people from all over the world. Just ask a Mexican.

The reason we sometimes cringe at the sound of the word "capitalism" (and saying "capitalism without conscience" kind of sounds like cringing) is because we have been carefully taught that "capitalism" is a system that functions like the law of the jungle, tooth and claw, dog-eat-dog, ruthless, without compassion, and where words ike "profit," "materialism," and "competition" all have four letters.

It isn't capitalism that's bad; capitalism is the most benign social system on earth. It's the mixture of totalitarianism with capitalism to form the mixed economy that gives capitalism a bad name.

Here's how it works: Capitalism respects individual rights, and totalitarianism doesn't. The Framers told the government that the primary reason it existed was to protect the individual rights of every citizen. That was a first in human history! Before that, the question had always been how much freedom the rulers would choose to allow the people to have. When our Constitution was ratified, the question had become how much power the citizen would decide to delegate to the government, whose only function was to protect his rights. In short, for the first time in history, it was the freedom of the government, not the citizen, that was restricted.

We thought, created, and produced. It was just too much for a government - which is basically made up of people who are control freaks and power-lusters - to resist. Little by little, it began to engage in activities that were never mandated by the Constitution, and in order to to this, it had to pass a body of law that supported its little excursions.

The only morally justifiable law is a law based on a respect for rights, and since a "right" can only be violated by the initiation of physical force or its intellectual equivalent, fraud/deceit, morally justified laws are fairly few and far between.

You can always pass an immoral law and thereby create a whole class of criminals. For example, you could pass a law against breathing on alternate Tuesdays, and everybody on the planet would then be criminals on alternate Tuesdays.

That's what has happened to us. We used to be Near-Capitalists, but many economists now believe we have gone over the edge.

Communism is "honest socialism"; the communists just flat out say that the individual has no rights, and that the government owns everything.

Fascism, on the other hand, is a more insidious, very dishonest form of socialism. The government actually controls everything, but superficially, it LOOKS as if the individual owns his business etc. Under a fascist system,the government reaps all the benefits but the individual takes all the risks, with no guarantee that the government will allow him to benefit.

Some economists think the mixed economy of the United States more nearly resembles fascism than communism. There are so many controls, ranging from the tax code to the Minimum Wage Law to the Anti-Trust Laws etc. ad nauseam, that it is said that no one who is trying to earn a living can operate without violating some aspect of these laws.

Why, even honest homeschooling parents have often had to break the law to teach their own children!

OK, the law against breathing was an exaggeration to make a point, but many of the laws, if not most of them, passed in the United States have the effect of criminalizing ordinary citizens trying to earn an honest living.

We have been taught in our government-run schools to hate and fear capitalism. About 75 years after the founding of our nation, Horace Mann guided our educational system into a black hole from which we are unable to emerge. As soon as the school system was brought under government control, the Utopian Socialists and other postmodernists leaped at the opportunity to hijack our children's minds and turn them against capitalism. By around 1950, just 100 years later, they had succeeded, and by about 1960, we could see the evidence on the streets, in the universities, on the bench, in the mainstream media, and in political office.

Capitalism isn't an economic system. Like Communism and Fascism and Islam, it is a complete social system, and to repeat, it is the only social system in history ever to recognize individual rights as its core, organizing principle.

Early in our history, before we had been taught to hate the best within ourselves, one of our greatest admirers, Frenchman Alexis de Tocqueville said "Democracy and socialism have nothing in common but one word: Equality. But notice the difference; while democracy seeks equality in liberty, socialism seeks equality in restraint and servitude."

The "lack of conscience" that you see doesn't come from capitalism; it comes from two classes of people: 1) those who trying to function despite the improper laws passed by a government that no longer respects rights, or 2) from people who make a personal decision to violate the rights of others.

Capitalism is a good thing.

 
At 5/18/2006 11:06 PM, Blogger Mr. Beamish the Instablepundit said...

Cubed,

Well said. :)

 
At 5/19/2006 5:49 AM, Blogger Always On Watch said...

Cubed,
I didn't mean to imply that capitalism CAUSES lack of conscience. And our capitalist leaders are steeped in leftist education. In fact, one cause of what I termed "capitalism without conscience" is our education system, with its constant drumming of multiculturalism and moral relativism. The "Me Generation" is in charge!

Capitalism is not at fault. As you said, Capitalism is a good thing.

IMO, "near capitalism" is a bad thing and brings out the worst in all types of individuals--not just the two types you mentioned!

 
At 5/19/2006 8:55 AM, Blogger Mussolini said...

I like how Cubed described capitalism as that which respects individual rights.

Makes sense to me now why I scored "capitalist" on a political test and not the more common "socialist," "centrist," "moderate," "conservative," or "republican" that all my associates received.

Fits the mold of the constitution party that I identify so strongly with - that which espouses a return to the constitution of the founding.

Too many people don't care; the constitution is just an old piece of paper. Who cares what it says?

 
At 5/19/2006 10:04 AM, Blogger nanc said...

i - i - i'm not telling who cube is!

 
At 5/19/2006 10:28 AM, Blogger Mr. Ducky said...

mussolini stop.

Cubed conflates an economic system and a political/ethical system. As a result there is no way to hack through his dogma.

I'm surprised that you seem to be making the same mistake.

 
At 5/19/2006 11:09 AM, Blogger Mussolini said...

I wasn't going anywhere with it, Ducky. I consider capitalism to be an economic system.

I only pointed out that his supposition was interesting in light of the political quiz I took.

Capitalism is not of necessity a function of a totally free society. Capitalism can in fact be discriminatory and class-based - and in fact most often is.

America is simply a prime example at its founding of what he was supposing and it was interesting to view it that way.

 
At 5/19/2006 1:53 PM, Blogger Mr. Ducky said...

I would say mussolini that the competitive market economy is necessary for efficient production and pricing.

My argument with laissez-faire (not capitalism per se) is that it is structurally unstable (Keynsian measures are necessary) and it is structurally unable to serve the poor. They will always be playing a rigged game.

 
At 5/19/2006 7:27 PM, Blogger Cubed © said...

Beam,

Thank you. The attack against capitalism is the attack against the only social system that has ever been organized around the respect for individual rights.

AOW,

Yeah, when you said "near-capitalism" is a bad thing I have to agree completely. The very fact that it is "near" capitalism means that there is a mix of good premises and not-good premises. The bad premises function as a foot in the door that will ultimately allow the good premises to be corrupted. That's why we are in the sad state we're in today.

Mussolini,

I can't tell you how tickled I am that you scored "capitalist" on a political test!

Let me caution you against Ducky's assertion that capitalism is "just an economic system," though. It, like communism and fascism and Islam, is a complete SOCIAL system, and as such, embraces all five branches of philosophy, including ethics and politics (politics is the application of ethics to social relationships).

Economics is philosophy in practice; Lord Bolingbroke liked to say that history is philosophy teaching by example, and that's true, but economics is philosophy in action.

It is through economics ("the allocation of resources - read that: values - both monetary AND NON-MONETARY") that we integrate all of our values and then put into action. In a capitalist social system, that includes the recognition of the right to think, to speak freely, to make decisions, to make judgments, to own and dispose of property, to pursue happiness, etc.

An understanding of economics - especially capitalist economics, which means FREE ENTERPRISE economics, where people freely and voluntarily engage in the allocation of their resources to their mutual satisfaction - is a terribly important weapon in the war with totalitarian societies such as communism, fascism, and Islam.

Just because people are free to make economic (monetary or non-monetary) decisions about how to allocate their resources doesn't mean every decision is easy. Let's say you desparately want a one-of-a-kind car that has unexpectedly come on the market and is for sale only today, at the same time the mortgage on your house comes due, and if you don't pay up today, the bank will foreclose.

You have enough money for one or the other, and you have to decide what choice to make. The decision is yours to make freely; no one has a gun pointed at your head, no one is initiating the use of physical force, and no one is engaged in fraud or deceit - but still, the decision may not be easy.

Whatever you do, don't let the Left deceive you about capitalism - it is a COMPLETE SOCIAL SYSTEM that embraces free-market economics. Freedom is the defining characteristic of a capitalist society.

It is not capitalism that is discriminatory and class-based (they've had their way with you here); capitalism, as a free society, allows us the freedom to take advantage of individual differences in talents, interests, and levels of motivation.

It even allows us the freedom to blame others for our failures, disappointments, and poor judgment calls in life. The freedom of capitalism offers no protection against this sort of intellectual/emotional failure on the part of the individual.

If someone has contempt for the honest work you do, and thinks that because he is wealthier and therefore "better" than you are, it is not capitalism's fault, it is that person's lack of intellectual/emotional integrity. But then, in a capitalist system, where PC isn't a factor (it is a tool of the Left), a person is free to express his lack of emotional/intellectual integrity. He is not obliged to go around PRETENDING that we are all clones of each other and call everyone "comrade."

I have enthusiastically recommended some reading about economics - I know, like, where do we find the time? - for freedom-loving people to help arm us against the hudna, kitman, and taqiyya of the Left and all their fellows.

Please get a copy of Thomas Sowell's "Basic Economics." He wrote it specifically for us, knowing how little exposure we've had to economics in school. If you like Walter Williams, you'll like Thomas Sowell, who is his protege.

We need - and by "need," I mean it is "necessary to the cause" to know some of the basics about economics - and trust me, it isn't the same thing as finance (yawn).

You can't fire the gun without the bullet. We can't fight an effective war against Islamic or any other kind of totalitarianism without some knowledge of economics and it's role in a capitalist society.

 
At 5/19/2006 7:32 PM, Anonymous the merry widow said...

Bravo, Cubed, bravo! A wonderful presentation of the meaning of capitalism! I may be printing that out for disemination. With proper attribulation of course!

tmw

 
At 5/20/2006 1:08 PM, Blogger Cubed © said...

TMW,

I can't tell you how relieved and happy it makes me every time I hear from someone whose mindset has survived the vigorous efforts of the Left to twist it, through years of lies and ad hominems, into believing that a society that requires the use of force in human relationships is somehow virtuous, while a society based on freedom is evil.

It's so important to get the truth out that I regard it as an "information emergency."

So thank you; please use any effort I make (no credit required!), past, present, or future, in defense of the most beautiful, virtuous, benign, American social system that has ever existed on the earth.

 
At 5/20/2006 6:33 PM, Anonymous the merry widow said...

Cubed- Sorry I didn't respond earlier, but I had to deal with the "Energizer Bunny" over at Warren's blog! I'm still trying to stop sniggering! Warren will probably paste us to the front of the first bomb into Iran! But thank you for the use of your info. I homeschool and I think I was born conservative! My father was a WWII vet and career AF, my mother was a Capt. in the American Red Cross so I was a military brat! Saw several places and met lots of people from all around the country and world. Broadens your outlook, especially when you hear about the conditions in other countries. You come to appreciate what you have! And the Founding Fathers were truely inspired in what they began, if we ever went back to what they envisioned we could save this country, but we have thrown G*D out and ushered in Evil, we are about to get what we have earned. I grieve but, I also have hope for the future!

tmw

 
At 5/21/2006 8:29 PM, Blogger Always On Watch said...

Cubed,
The very fact that it is "near" capitalism means that there is a mix of good premises and not-good premises.

In that pairing, the good premises get the blame. Ever notice that?

 

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